Tax challenges covid-19 poses on businesses 

Nov 4, 2021, 11:52 AM | Article By: Fatou Bojang

Since the start of the covid-19 pandemic, The Gambia like other affected countries has experienced cross cutting challenges in almost all sectors pertinent to its economy as a result of the impacts of the global pandemic.

Being a tax based economy, the country greatly depends on tax revenue to fund and cover public expenditures. It has no doubt been a challenge for businesses to pay these taxes, particularly those that are hugely affected by the pandemic. 

“We were closed but we were not exempted to pay our bills. I paid my rent fully. I also paid tax to KMC fully from my own money which was difficult,” said Rohey Leigh, a business owner.

The business, Rohey said, should pay its own taxes and everything but it was unable to do it because it was closed, adding that even after resuming, business was slow which has affected them. 

She highlighted other challenges she faced which includes payment of salaries. “The shop has employees but regardless of the closure of the shop I had to pay my employees because that was the contract I had with them,” she lamented. 

Alieu Jallow, a business owner who deals in general merchandise, said the pandemic led to the temporal closure of his business for about five to six months which left him struggling to pay up bills, rent and welfare of his employees.

“The impact has witnessed my ineffective payment of local business tax as a result of no sales. I normally offload two 40ft containers every year but the covid-19 pandemic has affected that. The only container I got was delayed and the freight cost from the shipping agency also increased.”

He said he had demurrage charges, lamenting that the import tax and the demurrage charges became exorbitant. “All the little expected profit was used to settle charges and taxes at the ports including the rent cost at the ports.” 

After going through difficulties to clear the goods, Alieu said there were poor sales which affected him financially. 

For Lamin Bojang, another business operator, being able to pay tax during the covid-19 period was challenging for him. He said they had low sales especially during the lockdown period. “There was a time when non-essential businesses were not allowed to operate and you had to pay for the store and pay tax which affected the business.” 

He said the pandemic affected their supplies from China because people could not travel. Also, people were buying more essential goods and sanitary materials than other types of goods. 

Speaking to The Point, Yankuba Darboe, commissioner general, Gambia Revenue Authority (GRA), said covid-19 is a global problem and The Gambia was not an exception. However in order to ease challenges on business tax payers during this period, Darboe said, the authority in consultation with the Ministry of Finance took certain steps to assist businesses that are operating within the country. 

The first step that they took according to him was to look at the CIF values of the commodities that come to the country. “We agreed that 20% should be knocked off the CIF values before calculating the taxes for various imports.” This, he added, was done to reduce the taxes to be paid on import. 

Besides that, he said, they discussed with businesses that are facing problems to put them on payment plan. “Also those that are in difficult situations are given tax break for a period of time. “We were working with all of them be it small, medium and large tax payers.”

In an article published by The Point in January 2021, The Gambia Revenue Authority (GRA) is reported to have collected over 11 billion dalasis as revenue for 2020, exceeding the amount they were tasked to collect by government. 

Collection of this amount nevertheless was challenging for both the authority and even more difficult on business tax payers considering the huge impacts of the deadly global pandemic. 

“Tax collection is very difficult more so during the pandemic because at that time maybe the resources are not much,” said Darboe. 

The deferrals, payment plans and more, according to him, affected their net collection. 

This story was produced with support from Journalists for Human Rights (JHR), through its Mobilizing Media in the Fight Against COVID-19 in partnership with Mai-Media and the Point Newspaper.

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